SHUANGHUI(SZ:000895) HTSC·2025-10-29 08:46Investment Rating - The investment rating for the company is maintained as "Buy" with a target price of RMB 33.39 [1][5]. Core Insights - The company's main business saw an increase in volume but a decrease in price, leading to stable profitability. The overall revenue for the first three quarters of 2025 was RMB 446.5 billion, with a year-on-year growth of 1.2%, while the net profit attributable to the parent company was RMB 39.6 billion, up 4.1% year-on-year [1][5]. - In Q3 2025, the total revenue was RMB 161.5 billion, a decrease of 1.8% year-on-year, but the net profit increased by 8.4% to RMB 16.4 billion [1][5]. - The company benefits from favorable pork costs, with the meat products segment accounting for 42% of total revenue and 96% of operating profit in Q3 [1][2]. Revenue Analysis - The meat products segment generated RMB 67.9 billion in Q3, down 0.6% year-on-year, but the sales volume increased by 0.9% due to rapid growth in emerging channels [2]. - The slaughtering business saw a significant revenue drop of 18.8% year-on-year, totaling RMB 67.5 billion, despite a 40.5% increase in slaughter volume [2]. - Other businesses, particularly pig farming, experienced a revenue increase of 100.5% year-on-year, driven by a 146% rise in pig output [3]. Profitability Outlook - The meat products segment achieved a record high profit per ton of RMB 5,186, up 6.5% year-on-year, with an operating profit margin of 29.9% [4]. - The slaughtering business faced a 46.9% decline in operating profit, with a profit margin of only 0.6% [4]. - The company aims to maintain stable profit margins while increasing sales volume, expecting a slight decline in profit per ton in Q4 2025 [4]. Earnings Forecast and Valuation - The earnings per share (EPS) forecast for 2025-2027 is adjusted to RMB 1.51, 1.59, and 1.64, respectively, reflecting slight increases for 2025 and 2026, but a decrease for 2027 [5]. - The target price of RMB 33.39 corresponds to a price-to-earnings (PE) ratio of 21x for 2026, based on comparable companies [5].